EXCLUSIVE: Specialty Grocers Remain Destinations Across Demographics

The first half of this decade has been defined by two events that directly, and at times profoundly, impacted the grocery industry: the pandemic and record inflation. While both of those crises have eased, the aftereffects linger and are impacting the way people shop and eat.

For example, many people have continued to buy food to cook at home, both to save money on dining out and keep the cooking habits they picked up during the COVID-19 era. In a recent blog post on retail and dining segments to watch in 2024, location intelligence and foot traffic data firm Placer.ai highlighted specialty grocery as a top sector benefiting from those behaviors. 

[Read more: “Retailers Should Prepare for Another Year of Marketplace Disruption”]

According to Placer.ai’s insights, the high cost of food away from home has spurred more visits to higher-end grocery stores. The blog post called out traffic increases at stores like New York-based Uncle Giuseppe’s, Illinois-based Cermak Fresh Market and California-based Lazy Acres.

In an exclusive interview with Progressive Grocer, Placer.ai’s head of analytical research, RJ Hottovy, said there is a place for specialty grocers even as consumers visit value stores like ALDI, Lidl and dollar stores for budget reasons. “People were still looking for new things and fresh ingredients last year, coming out of the pandemic. And very market-specific chains seemed to fare better when they had  closer eye or ear to what the market was looking for,” he explained, adding that social media platforms play into the success of these retailers. “It’s the Instagram society looking to show where you can get unique things.”

Placer.ai’s data affirms that specialty grocers hold a wide appeal. “If you look at the trade area, it generally was high-income shoppers but it wasn’t exclusive to that. People on lower and middle incomes are looking for uniqueness too,” Hottavy reported. 

Families are also specialty store shoppers. Placer.ai’s demographic data shows that families with children were overrepresented in the captured market trade area of the specialty grocers that were analyzed. 

These trends bode well for specialty grocers looking to mix up their offerings and environments, Hottovy noted. “We have shown that if you bring something new, you can have a profound impact,” he said. 

Meanwhile, the other trend of geographic population shifts dovetails into the newness factor that has propelled trips to specialty stores. “No matter what trade area you are in, markets have changed, whether it’s migration out of an area or to an area,” Hottovy said, adding that regions like the Carolinas and Florida are adding new consumers to their respective bases. “As an extension of that, people in those markets are looking for different things.”